Nissan tying up with NEC in batteries for ecological vehicles

Nissan is tying up with electronics maker NEC in producing batteries for ecologically friendly vehicles, the companies said Friday, signaling efforts by the Japanese automaker to catch up with rivals that have a head start in green technology.

Nissan Motor Co., Japan's No. 3 automaker, and NEC Corp. are investing 490 million yen (US$4.1 million; Ђ3 million) to set up a joint venture, by the end of this month, to produce lithium-ion batteries for green vehicles including electric cars and hybrids by 2009, they said in a statement.

Nissan has fallen behind Japanese rivals Toyota Motor Corp. and Honda Motor Co. in developing hybrids and other ecologically friendly technologies that reduce gas emissions blamed for global warming.

Tokyo-based Nissan has started selling hybrid cars, including the Altima, but licenses the technology from Toyota. Hybrids switch between a gas engine and electric motor to deliver better mileage and a reduction in carbon dioxide emissions.

But Nissan has developed what it said was a superior auto battery technology with NEC, Executive Vice President Carlos Tavares said.

Nissan plans to introduce its original hybrid vehicle by 2010, and an original next-generation electric vehicle in the early part of the next decade, he said.

"Together Nissan and NEC's engineers have addressed the key challenges of cost, performance, safety and reliability. We believe that we have a breakthrough technology: the lithium-ion battery produce we will produce," Tavares said.

Lithium-ion batteries are common in gadgets such as laptops and cell phones but have yet to be fully adapted to the more rigorous demands of a car engine.

Hybrids from Toyota and Honda use nickel-metal hydride batteries, although automakers, including General Motors Corp. of the U.S., are working on lithium-ion batteries for vehicles.

The battery product from NEC and Nissan will be made available to all automakers, Nissan said.

"Co-development with Nissan has enabled a superior-class battery that we expect to spread in the market at an unmatched speed," NEC Executive Vice President Konosuke Kashima said.

Nissan will have a 50 percent stake in Automotive Energy Supply Corp., the new joint venture, while NEC and subsidiary and battery maker NEC Tokin Corp. own a combined 50 percent.

Although sales of hybrids and cars boasting other environmentally friendly technology are still a fraction of standard models, both Toyota and Honda have seen their brand image improve from promoting such advances, such as the Toyota Prius and Honda Civic hybrids.

Sales of Toyota and Honda small cars have jumped in the U.S. and other overseas markets lately on the back of soaring oil prices.

Nissan was near bankruptcy before entering an alliance with Renault SA of France in 1999, and is forging a gradual turnaround.

Carlos Ghosn, chief executive at Renault and Nissan, who led the revival, in the past has played down the importance of hybrids, which are expensive to develop and take time to catch on.

He had stressed instead innovations in gas engines, while saying Nissan was working on its own hybrid technology.

Toyota is the first automaker to sell a mass-produced hybrid to consumers. Toyota has dozens of patents on the technology and has sold more hybrid vehicles than any other car maker.

Nissan shares, which have declined since earlier this year, lost nearly 2 percent in Tokyo to close at 1,228 yen (US$10.3; EUR7.7), while NEC dipped 1.2 percent to 642 yen (US$5.4; EUR4).